Monthly Market Debrief

Happy Independence Day! Don’t forget to keep all of your fingers tonight and to pour some tea into your nearest body of water.

Market Snapshot

We’re officially halfway through the year. For the New Year’s Resolutioners, this might be a good time to reflect on all the promises you made while drunk at a New Year’s party, there’s still plenty of time to get right before the year ends.

June was a fun time to be invested in the stock market.

US stocks continued to rise, driven largely by NVIDIA, which rose over 11% in June alone and is casually up over 150% so far this year.

In fact, NVIDIA is responsible for roughly a third of the entire US market’s overall growth through the first half of 2024.

The general outlook on the market and economy seems to be improving as well (allegedly).

The University of Michigan consumer sentiment index for June also came in higher than expected, “rising to 68.2 from the preliminary 65.6 reading,” whatever that means. I’m no mathematician but bigger number = better.

On interest rate cuts…

Traders are giving it a 64.1% chance that the Federal Reserve will announce rate cuts in their September meeting.

I haven’t asked Wilson his thoughts on the matter yet, but my guess is that he’s skeptical. My bet is whatever Wilson says. He does have a perfect track record with these Fed announcements, after all.

Company Highlight - Nike

The past few years have been a rough time to be in the athletic apparel business.

Nike shares plummeted last Friday, dropping over 20% to a four-year low and marking the worst trading day in Nike history. Nike stock is down over 48% in the past three years.

Most disappointing of all, Nike co-founder Phil Knight’s net worth fell by a mere $5.5 billion on Friday alone, more than any other billionaire. He may have to adopt the Dave Ramsey diet of rice and beans and live a modest life to make his remaining $30-something billion last the rest of his life.

Truly tragic.

Nike’s in good company though, with Under Armour shares down around 25% YTD, Lululemon down 40%, and Adidas down over 6% just in the past month.

Nike’s decline was sparked by a disappointing earnings report last Thursday, which disclosed a 2% decline in its quarterly sales and an expected 10% year-over-year decline in sales, far worse than analyst projections.

I’m no analyst, but increased competition in the budget athletic apparel space probably hasn’t helped Nike’s sales. My favorite running shorts were an Amazon purchase from some company I can't even pronounce at a fraction of the price of most name-brand athletic clothes.

Maybe Nike should consider making a shoe with semiconductors and AI inside the sole to give its stock value a much needed boost?

Current Event - Election Year Madness

June was an interesting month for politics.

Since this is a personal finance newsletter, not a politics newsletter, here are some links for some light toilet reading if you’re trying to keep up with the political happenings.

Major newspapers call for Biden to drop out after debate - After a, well… interesting Presidential debate between Biden and Trump… public calls for President Biden to end his reelection campaign have blown up, both from major media outlets and from notable members of the Democratic Party.  The New York Times home page is literally flooded with articles about President Biden… and caesar salad.

The day after the debate, Biden announced at a rally that he has no intentions of calling it quits.

US Supreme Court rules Trump has broad immunity from prosecution - In a 6-to-3 ruling on July 1st (I know, technically not June), the Supreme Court ruled that Former President Donald Trump “cannot be prosecuted for actions that were within his constitutional powers as president.”

Although no president has ever been prosecuted for actions taken while President (apart from impeachments), this decision was the first time any form of presidential immunity was solidified by the Supreme Court. 

President Joe Biden’s son, Hunter Biden, is convicted of all 3 felonies in federal gun trial - Felonies must be free these days. Last month, Hunter Biden (President Biden’s son) was convicted of 3 felonies related to the purchase of a revolver in 2018 when, prosecutors argued, Hunter Biden lied on a mandatory gun-purchase form by saying he wasn’t using or addicted to drugs.

Hunter Biden’s lead defense attorney announced their intentions to “pursue all the legal challenges available.” President Biden stated that he would accept the outcome of the trial and “respect the judicial process as Hunter considers an appeal.

November’s right around the corner, and who knows how the election will pan out.

One thing is for sure. I’ll continue to buy and hold index funds regardless of who holds the Oval Office next year, because #trusttheprocess.

What We’re Reading/Watching/Listening To

I’m wholly committed to two things on TV right now: cycling and House of the Dragon.

If you’ve never watched cycling before, I recommend starting with the Tour de France which is on through July 24th. Just watch the last 10 miles, though.

If you’ve never watched House of the Dragon, you’re missing out. It’s like Game of Thrones minus the Season 8 meltdown.

Debrief on Deck

Next week, Wilson will cover my favorite three letters in investing, ROI. What is it? How can you maximize it? What are my favorite three letters outside of investing?

All good questions, two of which will be answered next week.